question archive Information regarding Trinidad Company’s financial assets at fair value through other comprehensive income is as follows: Aggregate cost – December 31, 2010 1, 750,000 Unrealized gains – December 31, 2010 40, 000 Unrealized losses – December 31, 2010 260, 000 Net realized gains during 2010 300, 000 On January 1, 2010, Trinidad Company reported an unrealized loss of P15, 000 as component of other comprehensive income
Information regarding Trinidad Company’s financial assets at fair value through other comprehensive income is as follows: Aggregate cost – December 31, 2010 1, 750,000 Unrealized gains – December 31, 2010 40, 000 Unrealized losses – December 31, 2010 260, 000 Net realized gains during 2010 300, 000 On January 1, 2010, Trinidad Company reported an unrealized loss of P15, 000 as component of other comprehensive income
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Information regarding Trinidad Company’s |
financial |
assets at fair value through other |
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comprehensive income is as follows: |
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|
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Aggregate cost – December 31, 2010 |
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1, 750,000 |
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Unrealized gains – December 31, 2010 |
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40, 000 |
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Unrealized losses – December 31, 2010 |
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260, 000 |
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Net realized gains during 2010 |
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300, 000 |
On January 1, 2010, Trinidad Company reported an unrealized loss of P15, 000 as component of other comprehensive income.
In its 2010 statement of changes in equity, Trinidad Company should report what amount of unrealized loss on these securities?
a. 260, 000
b. 220, 000
c. 205, 000
d. 0
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Answer b |
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Unrealized losses |
260, 000 |
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Unrealized gains |
40, 000 |
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Net unrealized losses – December 31, 2010 |
220, 000 |
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Unrealized loss – January 1, 2010 |
15, 000 |
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Increase in unrealized loss |
205, 000 |
The increase in unrealized loss of P205, 000 is reported in the statement of comprehensive income as component of other comprehensive income.
However, the 2010 statement of changes in equity should report the cumulative unrealized loss of P220, 000.
Incidentally, the net realized gains represent the gains s from the financial assets that are actually sold should be shown in the statement of comprehensive income as component of profit or loss.
